I've heard people using this idiom, such as "each day is better than the next", or "you hope that each experience you have is better than the next" (heard this one on a TV show not long ago), apparently in a positive way.

However, if taken literally, I find the meaning very negative - if the current thing is better than the next, then the next thing must be worse, so things would just keep getting worse and worse. How do you explain this phrase/idiom?

As noted, it apparently is a misuse of a sentence, especially in Am E, though, as Ngram. shows, I'd like to point out that the correct sentence better than the last has been gaining more popularity versus better than the next in the last decades.